Homeowners Fight Back

May 22, 2004

By Cliff Baines
Copyright AHRC News Services

Most states allow non-judicial foreclosure by homeowner associations. This means that a homeowner association can place a lien on your home, and then sell it without having to get approval from a court. Normally, this can be done in about 90 days.

Over the years, AHRC has documented many shocking foreclosures. Mrs. Swindle Mrs. Anderson and her disabled son owned a home in Huntington Beach, California. She went on a vacation to Florida, and when she returned, she found her home had been foreclosed on. Other names like Mary Lindsay, Mary Horton, Marlene Murphy, Patrick Mahaffey Dave Donnell Winona Blevins, Richard Glassel Geneva Brooks, Dotte Lesko, Marie Brown Desert Crest Seniors Robert Nelms Hortensia Rodon, Melissa Colburn, Mark Taylor Tom & Anita Radcliff Yolanda Mitchell, - and many more - dot the foreclosure landscape. Each one, shocking in a supposedly civilized society, cried out for redress and reform, but none came. This was the first barrel to the CAI lawyers' shotgun.

But there was a second barrel to the CAI shotgun which, cumulatively, exceeded the dollar amount of damage inflicted by the first one. This shotgun barrel filed Notices of Trustee Sales. These notices are filed in the recorder's office in a county. They officially announce that the homeowner association will sell your home - generally within 90 days - unless you make good on all the unpaid assessments, lawyer's fees, legal costs etc.

Whether the charges are legitimate or not, most people pay them to save their homes. They cannot afford to file a lawsuit as the cost of doing so vastly exceeds the amount that is demanded by the homeowner association and its CAI lawyer. While no comprehensive data is yet available on the amount of lawyer fees that are bundled into the demand, estimates suggest that they are between 80% to 90% of the bill. The tail begins to wag the dog. The unpaid assessments now become a tool for the CAI lawyer to generate thousands in legal fees. Homeowner associations seem to have been invented by CAI lawyers as cash registers for themselves.

But, as CAI lawyers have begun to learn, they are not exempt from the laws of physics. Every action demands a reaction.

In the early 90's, in response to numerous complaints, AHRC did an extensive study of public documents dealing with fraud in homeowner associations. They discovered among other things that the largest management company in the U.S. at that time, Marquis Management, was involved in at least 65 lawsuits in Southern California counties alone. Most of these involved some sort of financial fraud. Marquis was a prominent member of CAI.

Its owner, Diane Fullerton, publicly hobnobbed with politicians, and paid herself a salary of $50,000 a month. The investigation showed that she had taken her previous management company into bankruptcy. However, she simply changed the name,and started up in business again the following morning in the same location and with the same staff. The latest report on her is that the federal government has arrested her on charges of defrauding a bank.

While many factors contributed to the bankruptcy, AHRC's investigation of the sordid financial practices of Marquis played a role.

Geneva Kirk Brooks, one of the giants of the homeowner movement in Texas against corruption in homeowner associations, received a call one day from one of her reporters (she had a news service)who was in the county recorder's office. He told her that one of her homes had been sold in foreclosure.

Shocked by this news, she began an investigation and soon discovered that her case was not unique. She said that she found 4000 foreclosures listed by the recorder in Harris County, Texas, alone. She paid $2,000 for the list, and began to probe further. She made two shocking discoveries.

The first was that the law authorizing non-judicial foreclosure in Texas homeowner associations was passed in the waning minutes of the legislature by voice vote without any of the normal committee hearings. It was signed into law by the governor, George Bush 1995.

CAI lobbyists had pulled off a major coup. The sponsor of this law was a CAI mmber Senator John J. Carona (R-Disrtict 16, Dallas). He claims to have the largest management company in the U.S., It is reported that another major CAI foreclosure lawyer, Michael Gainer, wrote this Texas non-judicial foreclosure law.

The second discovery was that there was a disproportionate number of black and Hispanic homes being foreclosed on. Geneva is now gone, but Sentinel Fair Housing, a non-profit organization in Oakland, California, reached a similar conclusion in a study of homeowner associations in Alameda county. These findings support the perception that CAI lawyers often target those who are seen as being vulnerable. An unusual number of people who suffer foreclosure are minorities and single and/or elderly women.

Geneva's investigation was also instrumental in Chubb Insurance pulling out of the homeowner association insurance market in Texas. She constantly attacked Chubb's practice of defending errant homeowner association boards against homeowners. Several large judgments against Chubb have caused it to abandon the Texas market as unprofitable.

Geneva, unfortunately, is gone now. But a friend of hers, Beanie Adolf, continues the work. For years, Beanie and her son have been documenting the foreclosures in Harris County. The results of her painstaking work can be seen on her website: www.HOAdata.org..

In other states, homeowners have begun to research public records. Janice Wolf in Orange County, California, has discovered that she can research many records online using the County recorders website. . Melissa Colburn has been doing extensive research in San Diego. The Radcliff family has been doing it in their Calevares County. An Emmy winning reporter, Jeff Coyle has been doing research on foreclosures in San Antonio, Texas. On May 4 in Sacramento, Senator Martha Escutia, chair of the California Senate Judiciary Committee, asked AHRC to conduct studies on non-judicial foreclosures in homeowner associations. AHRC promised that it would, and is doing so.

As data often drives public policy, homeowners around the country have a powerful tool at their disposal to fight the non-judicial foreclosure laws that were imposed on them by CAI. Most of the staff at recorders' offices are very helpful. In a short period, even the most inexperienced homeowner can get the hang of how to dig up the data. Those with some computer experience can quickly transfer this onto the internet, and publish it on the AHRC website. Become an HOA detective!

These statistics will envitably show how CAI lawyers have decimated the homes and savings of a vast swath of American citizens. This data can then be used to spur our legislative representatives into corrective action. It was the Radcliff case in California that was the straw that broke the back of the legislative camel. When one sees the statistics, nobody in good conscience can defend non-judicial foreclosure in homeowner associations.

2004 should be the watershed year when the process of dismantling non-judicial foreclosure begins to produce results. For too long, homeowners have been living under its inhumane and unjust yoke. It should be thrown onto the scrap heap of history. After all, the Declaration of Independence did not declare that we have the right to life, liberty, but not to our homes. Take them back!